When President Obama announced his Climate Action Plan, he essentially aimed the big guns of government at the Coal Industry. By directing the EPA to draft carbon emission standards for coal fired power plants, that is unattainable with current technology, many believe the President has set the table to legislate or flat out mandate the end of coal generated electricity.

Many Americans, liberal and conservative alike, tend to agree that the coal industry is not only in the fight for its life, but will ultimately lose. This assumption is largely based on the continuous news coverage on both sides of the political spectrum which details seemingly non-stop victories of green energy activists in their fight against the coal industry. And there are indeed victories: new wind and solar energy resources are being built at a record pace; old coal fired power plants are being closed at record rates as well; protests akin to an anti-war movement against anything coal related on both coasts are a monthly, if not weekly event; and the news that the EPA is moving closer to drafting new and unreachable standards of carbon emissions for coal fired power plants all serve as a count-down to the end.

Facts are hard to gather from today’s news outlets—regardless of their political leanings—even when they tout a neutral approach. Their job is to shock and compel to keep the audience tuned in. When looking past the bias on both sides, the simple facts paint a far less shocking picture of the future of energy production in the United States. But when the data is cross-referenced against these simple facts, an even more astounding potential for the future of coal fired power in the United States reveals itself.

Point by point, here are the results.

Can Renewable Energy End the Coal Power Industry?

In 2012, coal power generated 1.517 million gigawatt hours (GWh) of electricity for the United States. This represented a 37.4 percent share of total electrical energy generation. This was down from the peak of about a 57 percent share in 1988, which resulted in approximately the same output: 1.5 million GWh. The percentage drop is due to availability of other energy sources: mostly natural gas (which has more than doubled its share since then) meeting the increases in overall electricity demand over the last 25 years. In 2012, renewable energy sources (excluding hydro-electric power) produced a combined 144,340 GWh (140,000 in Wind, 4,340 in Solar) of electricity in the United States representing a 3.6 percent share of all electric energy generation.

That’s 1.5 million GWh for coal versus 144,000 GWh for renewables. Preliminary data for 2013 shows wind energy having made strong gains—up an impressive 22.9 percent from 2012. Yet that still only represents 4.1 percent of the total share of U.S. energy production, up a total of 0.5 percent of the total. Of note, however, coal power regained ground in 2013 adding back 1.68 percent of its share from 37.4 percent to 39.08 percent.

There simply aren’t enough new wind and solar energy projects coming online to fill the gap.

Despite the leap forward in Wind energy production in 2013, even in an environmentalist’s perfect world where every coal fired power plant were taken offline over the next ten or even twenty years, there simply aren’t enough new wind and solar energy projects coming online to fill the gap. This is especially true considering the forecasts that wind energy production gains will only garner an additional .4 percent over the next two years, reaching 4.5 percent of total U.S. energy production by the end of 2015.

Some scientists certainly argue that by 2030, renewables could become cheap enough to accelerate green energy production. A New York study claims that by building over 12,700 offshore wind turbines along with a combination of “onshore wind and an array of solar, hydroelectric, tidal and geothermal plants and installations,” all of New York State’s power needs could be met. They further argue that the development of technology, which currently is in its infancy, to store wind and solar energy when the wind isn’t blowing and the sun isn’t shining, can ensure a constant stream of energy.

In The Spotlight

Perhaps if, all things being equal, it is attainable. But the multitude of factors that could roadblock this effort are so vast that frankly, without making any argument, the likelihood of this dream is impossible by 2030. Even if the optimistic research claiming that wind energy will produce 20 percent of the nation’s power by 2030 is accurate (with solar adding another 10-15 percent), the gap in power generation needing to be filled by that decade is substantial. When considering the EIA’s (U.S. Energy Information Administration) forecasts for all renewables, (including hydroelectric power), which amounts to only 16 percent of power generation by 2030, an even larger gap exists.

Further, in-fighting amongst liberal groups over wind power development is beginning to heat up. Without a protracted explanation, wind power is increasingly being scrutinized by hardcore liberal environmentalists as reports of thousands of birds including at least a half dozen endangered Golden Eagles have been killed by wind turbines in California alone. This fight is little reported on but it is real and it is growing.

Another stopper is that the current surge in green energy growth has come largely due to massive federal subsidies. This is not to say the coal industry hasn’t in the past benefited heavily from government subsidies, but at present, wind energy subsidies alone are estimated to represent about 40 percent of the total federal financial assistance to the energy industry while only producing about 4 percent of the nation’s power. Add solar and other renewables and that number climbs to about 50 percent. All it will take is one Federal administration in the next decade that does not support this financial assistance to green energy and the renewable energy boom will likely come to an end.

Renewable energy won’t kill the coal fired power business in this decade, or the next three decades, because, as Bud Clinch of the Montana Coal Council simply put, “There is no substitute power to put into play.”

Will the Closing of Coal Fired Power Plants End the Coal Power Industry?

This topic is probably the single biggest indicator for most industry analysts, conservative reporters, and liberal activists of the decaying health of the coal energy industry—and the diagnosis for recovery seems bleak. But the key word here is “seems.” As of 2013, plant owners expected to “retire” 213 plants between 2013 and 2023 with 130 additional plants already having been closed between 2005 and 2012. These future reductions will drop overall capacity by estimates ranging from 10 percent to 20 percent. However, coal power generating stations typically run (or generate) between 65 percent and 75 percent of their capacity, meaning, overall output could still be maintained at current levels.

Though environmentalists claim victory on the grounds that it is they who have forced these closures with the help of increasingly strict environmental regulations imposed by federal agencies, the fact is that most of these plants have simply outlived their originally planned 30 year life-span. True, upgrading these plants to meet new standards played a large part in the decision to close their doors, but the costs to upgrade were made excessive mostly because of their greatly outdated nature.

Many of these plants were built prior to the 1960’s. Retired in 2010, Iowa’s “Sixth Street Generating Station” was built in 1925—hardly the result of external pressures. Roughly 68 percent of all coal power plants were constructed prior to 1974. Of the actual 130 plants closed between 2005 and 2012, only twelve were built after 1975. Of the 213 scheduled by their owners for closure between 2013 and 2023, sixteen were built after 1975 yet of those, the six newest are all single boiler unit College or University plants which combined produce about the same power as one moderate sized plant.

Another issue not being reported during the passionate debate is the fact that coal plants built before 1970 operating without emissions controls (grandfathered in under the Clean Air Act) are typically only “online” and generating power 40 percent of the time. These plants represent nearly two-thirds of all plants in the nation yet are only producing about one-third of coal energy’s combined power output. What this means, aside from the horrible fate of hundreds of workers, is these plants weren’t flagship producers and their closure won’t affect the industry’s power generation ability… they will only affect total capacity.

Despite all the closures, coal energy capacity—the amount of energy it is capable of producing, remains, and will remain well above what it has typically been called to produce. Add to this the increases in efficiency in existing plants and it is easy to see that coal fired energy will still maintain its ability to keep the lights on regardless of the hundreds of abandoned plants which will dot the countryside. Further, despite the uncertainties prompting several planned new plants from being constructed, there actually are new plants under construction.

Though the number of planned closures could increase with legislative action, at present, the retirement of coal plants in the coming decade won’t kill coal power.

Can Legislation, Regulation or Executive Action End the Coal Power Industry?

As previously stated, coal represented 37.4 percent of all electricity generated in the U.S. in 2012—an all time low both in regards to percentage share of the total and its gigawatt hour (GWh) output. The last time coal generated less than 1.5 million GWh of electricity was 1987, and that was only due to low demand. Of interest though, early results of 2013 power generation data indicate a reversal of fortune, even if temporary. Indicators for coal energy production reveal that coal was generating energy at a pace of about 11.5 percent above its 2012 numbers which brought it back to an estimated total 2013 output of 1.61 million GWh output, or, nearly 40 percent of total national energy use.

But the number rattling is likely getting dizzying. The point of discussing those numbers is this: the nation still needs coal energy. The simple and slight 2013 rebound may not be proof enough, but in speaking to potential coal power killing federal action, a reminder in the form of an eye-opening chart showing how little impact renewable energy has on the electric grid with wind being its main component may help as shown below.

Note: solar only accounts for about 2.7 percent of renewable energy’s portfolio

So let’s look at a worst case scenario to really test the claims by conservative talk radio and liberal news outlets alike that “outright destruction” of the Coal Energy Generation Industry is the end game of the President.

Assume the EPA writes the toughest most impossible carbon emissions standards rules imaginable—rules that no technology in existence could help coal fired power generating stations meet. What truly would be the result? Would the Obama administration, as irrational as some believe it to be, force nearly 40 percent of the nation’s electrical output to simply disappear? Even if you are convinced that Obama is a card carrying communist, communists need electricity to run a revolution.

Even if coal is phased out over the course of a few decades, renewable energy sources such as wind and solar power simply can not fill the void by 2020, 2030, nor likely even 2050, regardless of new innovation. So if total destruction of the coal industry is not the goal of the “War on Coal,” what’s the aim?

The Shocker?

President Obama has certainly been telling his base that the “Green Revolution” is on and King Coal is in the cross hairs. His base kept the faith and propelled him to his second term on the belief that he would wage a war on coal. Now he has, and his goal, he implies to them, is to save the planet from carbon belching coal plants by shutting them down. This is lie #1 (or more like “misdirection”), all to the backdrop of the smiling cheers of his supporters.

Legislation or executive order aimed at making the creation of coal power nearly impossible due to unattainable environmental standards would shut down every coal fired power plant in the nation. To a tunnel-vision liberal or a fearful conservative, that’s exactly what it looks like. And that is what it is supposed to look like. But don’t get confused here, the mandate will come. The impossible EPA standards will be handed down and the coal power industry will be given the ultimatum. Of this, there is no doubt.

But which of the following threats to the coal energy industry seem most plausible: meet these new emissions standards or shutdown? Or meet these new emissions standards or pay some heavy fines, year, after year, after year.

Remember Obama’s failure to get Cap and Trade legislation passed, aimed at forcing industry to essentially pay a tax on their carbon emissions? This bill was defeated to the humiliation of the Democratic Party and the President.

Also note this quote from 2008, when candidate Obama stated during a press conference: “if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

He also admitted: “...this notion of no coal is an illusion… Because the fact of the matter is that we are getting a lot of our energy from coal…” The implication may seem to be “destruction” of an industry but the face value statement seems more valid. “they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.” Because he knows that “...this notion of no coal is an illusion...”

The President is not a stupid man despite what many conservatives think. Coal energy simply can’t disappear. Is it possible that by making impossible carbon production standards the President is perhaps instead preparing the coal industry for a de facto “Carbon Tax” to feed the treasury’s bottom line? Or is he threatening destruction of the industry with the actual goal of ultimately winning the “Cap and Trade” debate thought long lost in legislation. Either way, the threat is intended to result in financial bloodletting by the coal industry.

It may seem that the administration wants to destroy the coal industry because that is the intended purpose. But it truly may be a case where there is a realization by the administration that they have a golden “multi-billion dollar” goose on their hands and they are doing everything they can to scare the “cash” out of it without (or at least before) killing it. And that cash is desperately needed to fund the “Affordable Health Care Act” and to continue subsidizing wind and solar development which is currently at a rate that is simply no longer sustainable.

Legislation won’t kill coal because the administration can neither afford to lose the 38 plus percent of the nation’s energy it currently produces nor the billions in potential fines it will stand to collect from the coal industry’s failure to meet unattainable EPA standards.

Could Natural Gas End the Coal Power Industry?

But there has to be another lie or misdirection in place to make this a great “conspiracy” rather than just a good one. The administration knows that legislation which helps force the closing of old power plants, and the threat of using a renewable energy industry still in its infancy, is simply not enough to force the kind of unconditional surrender needed to reap the full financial benefits of a back door tax. If the coal industry remains strong enough, they can use their steady share of 37-39 percent of total electricity generation to defend themselves. A strong industry might still be able to influence Congress and use legal measures to block unreasonable EPA regulations. An industry in total collapse with declining impact on the power grid will have little impact on public opinion and legislative action.

The President understands that a far more powerful weapon has to be brought to bear in this battle, and it is coming in the form of the biggest lie he told his base. And it is likely the most surprising to both ends of the political spectrum.

Lie/misdirection number 2: Obama stands with environmentalists in condemning fracking. False. In fact, he supports it. This may seem impossible, but all one has to do is conduct a basic online search using the key words “Obama” and “fracking” and the proof of this fact is made clear. More surprising, in light of the recent Russian incursions in the Ukraine, the National Journal reported that Obama may actually be hinting that Europe begin the practice of hydraulic fracturing.

The single biggest threat to the coal industry has actually been the Natural Gas industry. Natural gas prices began to dive to record lows at the end of 2008. The recession, coupled with a huge expansion of domestic production (due to the expansion of fracking) struck a tremendous blow to the natural gas industry by both killing demand while providing a huge “overstock” of supplies which in any economic equation will rock prices. In August of 2009, the price per thousand cubic feet dipped below $3 while the summer before it was at $13. But this in turn began to create a slingshot effect for the industry. The cost of utility bills for the average consumer dropped by 60 percent and as a result, the industry saw new opportunities.

As the climate change debate began to take shape during Obama’s first term, the cleaner burning energy source had a case to make in arguing that not only was their fossil fuel cleaner than coal, it was now a much less expensive energy source. The administration took note.

Legislating the closure of coal fired power plants doesn’t work fast enough. But capitalism—a pure economic force—can do just about anything. If one source of energy is cheaper, the other will begin to suffer, and coal suffered greatly from a four year period of inexpensive natural gas energy production. In fact, the closure of many coal fired power plants has more to do with economics than it does with green energy led legislation.

This is not to say lowering the price of natural gas was the Obama administration’s plan all along. It simply came to them at the right time. As NG prices dropped, so did coal’s share of total electric power generation for the United States almost in lockstep. Looking at a graph of the change reveals a mirror-like relationship between the two from 2000 to 2012. As coal’s total share of the nation’s electric generation fell, natural gas’ share increased. If anything was killing coal over the last several years, it was the Natural Gas industry.

Looked at in another way, in 2000, the two sources combined made up 67.52 percent of the nation’s energy generation. In 2012 their combined share was 67.86 percent. Virtually no change. But in 2000, coal’s share of the total was about 52 percent while natural gas provided only about 16 percent of the nation’s power. In 2012, coal was down to 37.4 percent with NG at 30.29 percent.

Natural gas, not the Green Energy Revolution, has been the single greatest threat to the coal fired power industry. President Obama saw the writing on the wall. What he could not do with the power of his office alone, market forces through the NG industry was doing almost by itself. Recession aside, it was hydraulic fracturing that was providing the Natural Gas industry with its unprecedented boom, and with the oil industry booming a lot louder, the NG industry’s expansion was largely going unnoticed by the media.

Many could not believe the President was quietly supporting fracking, but the proof is there. His support was indeed quiet—until after reelection. That, with the obvious fact his hardcore base of support is or was made up of hardcore environmentalists has made his support of fracking for natural gas unbelievable to liberals and conservatives alike. But his base now realizes the truth as he is no longer quiet on the issue.

His former supporters are now turning out by the thousands, protesting his stance on fracking, shouting him down at rallies and screaming insults of betrayal. That doesn’t matter. He no longer needs their votes.

But there is an immediate need for him to send a clear message to the coal industry. He supports fracking, and thus supports natural gas as the nation’s top alternative to coal fired energy. Why? Because time is running out and he needs to use this ultimate weapon—natural gas—in his battle to force the Coal Industry to the negotiating table. If he doesn’t force surrender now, it may be too late by the time the EPA can draft and impose the standards he needs to implement a defacto “Carbon Tax” on the billion dollar coal industry he’d been seeking since 2009. Soon, natural gas may no longer be the ultimate weapon he needs it to be.

While the general consensus is that natural gas prices will take decades to return to prices seen prior to 2009, the point to be understood is that NG prices are on the rise. From the all-time low of about $2.74, prices are already above $4.50 as of April 2014 after a spike to $6 in late February. With this increase, coal has already become competitive with natural gas again. According to the U.S. Energy Information Agency (EIA), “When the price of natural gas rises significantly above $4.00/MMbtu [one million BTU], coal plants are dispatched at a much higher frequency, displacing gas consumption.”

In fact, with the warm winter felt in 2012, natural gas consumption began to flatten-out which led to the rebound of coal fired energy production’s total share of output from its all time low of 38 percent back to around an estimated 40 percent this year. With few exceptions, the price of coal tends to remain steady over time and is anticipated to remain steady into the next few decades.

Although a side-by side comparison of coal prices to natural gas prices in “dollars per million btu’s” is not a penny to penny accurate indicator of price competition, the EIA charts still paint a fairly clear picture. It has been the record low prices of natural gas that has done the most damage to the coal industry in the last four years, but that damage is coming to an end.

Though the President was not behind this dramatic drop in NG prices, he’s seen how powerful its impact has been on the Coal Industry and is thus using it as the primary weapon in the War on Coal.

In an effort to calm his angry supporters on fracking, he’s taken the tactic of “I’m not hitting you in the face, I’m killing the bee on your nose.” In reality, he’s telling them he supports natural gas because it is a cleaner burning fuel than coal and will thus help achieve their Global Warming goals. To hear the President explain it, natural gas is green energy and that’s his selling point. But Liberals aren’t buying it as their “shock and disbelief” is slowly turning to outrage. To them, natural gas is a non-renewable, drilling intensive, fossil fuel just the same. When it comes to the issue of fracking itself, he’s flat out ignored their protests.

Though still a threat to the Coal Industry, no level of support for fracking by the Federal Government will create a second NG boom. Natural Gas prices are already on the move and the industry has lost its head of steam in capturing an ever greater share of the U.S. energy production market. Natural Gas won’t kill coal power.

The Future of Coal Power

The bottom line outlook for the coal power industry surprisingly enough comes directly from the Federal government itself. According to the U.S. Energy Information Administration’s own current data, it anticipates coal fired energy will still represent a little over 35 percent of the generated power in the United States by as late as 2040, increasing its generating output from its 2012, 1.5 million GWh to around 1.83 million GWh by 2040—without any significant new power plant construction. Thus, the Federal Government’s own experts on the industry are predicting coal will live well into the middle of the century.

Though this projection is only an 18 percent increase over 22 years—a fairly small increase compared to the gains by natural gas and renewables—and 9.4 percent less than its high in 2007, the question is not whether the coal power industry will thrive, it is whether or not it will survive. It will.


Eric Sharpe
About The Author Eric Sharpe
Eric Sharpe is editor and feature contributor of Energy Ink Magazine, which covers the energy industry in the Rocky Mountain West and Northern Plains. He holds a Master’s degree in Educational Technology from Pepperdine University.


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